The challenges facing businesses today are great, but so are the opportunities. With ESG, companies can change the future in a way that few in the past have. Many companies are actively planning and implementing policies to reach net zero by 2050, for instance. While others, in addition to setting net-zero goals, are using ESG to help them create innovative products and services that are good for the environment and good for business.
Having a strong ESG strategy will be key to helping companies reduce their greenhouse gas (GHG) emissions and meet climate targets. ESG provides a more holistic view of a company’s non-financial performance and helps companies identify and mitigate risks. And in today’s rapidly shifting business environment, there are myriad risks and challenges to consider.
Supply chain risk, regulatory compliance, climate change, creating a safe workplace for employees—these are just a few challenges companies must continue to address and overcome in 2023 and beyond. ESG provides the framework to address these challenges and ensure long-term profitability, sustainability and resilience. ESG is no longer just a compliance exercise, but a necessary business strategy that provides returns for both companies and the planet.
However, despite the benefits and importance of ESG, disparate reporting standards and knowledge gaps within organizations are creating barriers to ESG success. But no company needs to embark on its ESG journey alone. The first step of any ESG journey is finding the right partners and assembling teams to create a reporting framework with the key targets, initiatives, performance metrics and internal and external reporting standards necessary for ESG success.
These teams can then conduct a materiality assessment to gauge which ESG issues are the most important for an organization. This process involves both internal and external stakeholders, including employees, investors, board members, suppliers and members of the community where a company operates. Once companies determine which ESG issues are material to them, they will need to work with ESG solutions experts who can help identify the real-time data and resources needed to comply with reporting standards and other stakeholder demands.
With investors, consumers and regulators demanding more transparent ESG reporting from companies, the importance of having quality data cannot be overstated. In fact, our recent report on ethical consumerism found that inaccessible or unreliable product data is hampering sustainable buying choices and behaviors. With software, content and data that is transparent and accessible, companies can improve and promote their ESG performance and build trust with consumers, thereby igniting long-term growth and ESG success.
Speaking of software, independent research and advisory firm Verdantix recently recognized Sphera as a market leader in its 2023 Green Quadrant EHS Software report. Sphera has secured a top spot in the Leaders quadrant in Verdantix’s Green Quadrant EHS Software Report since its launch in 2012 and has gained strong market momentum over the past two years. The 2023 report highlights Sphera’s experience serving large, multinational firms and its functionality across EHS (environment, health and safety), ESG, operational risk management (ORM) and product stewardship.
Additionally, Sphera was awarded the highest score among 23 vendors assessed for ESG and sustainability management for supporting target-setting at various organizational levels, sustainability program management and advanced forecasting and trend-finding. Sphera also received a perfect score for its offering that facilitates data collection and data checks for Scope 1, 2 and 3 emissions, as well as the top score for air emissions management.
Sphera was one of only a few of the assessed providers to be accredited by the CDP and certified by the Global Reporting Initiative (GRI). I’m proud of Sphera’s continued recognition by Verdantix as a leader in EHS software and look forward to helping more businesses manage and mitigate risk and achieve their ESG ambitions.
Setting and meeting ESG goals are only two pieces of the puzzle, however. Communicating ESG performance accurately is key to long-term success. Without auditable data, companies risk being accused of greenwashing, which occurs when companies portray their products or services as being more sustainable than they actually are. Embracing greater transparency around ESG data enables companies to report performance more effectively to internal and external stakeholders and prevent greenwashing.
After all, greater transparency leads to better decision-making, which allows companies to enact meaningful change and achieve long-term profitability, sustainability and resilience. With a strong ESG strategy and the right partners and tools to support it, companies can lead the fight against climate change and create a safer, more sustainable and productive world for us all.